Global Edge Data Centre Market Set to Exceed $300 Billion by 2026: JLL

Technological megatrends such as IoT and generative AI are driving the need for computing power closer to data creation and use, spurring the growth of edge IT infrastructure.

Singapore, August 14, 2024 – The anticipated expansion of data-reliant technologies, such as the Internet of Things (IoT) and generative artificial intelligence (AI), on a global scale will necessitate extensive support from edge data centres. According to a report by global real estate consultancy JLL (NYSE: JLL), the edge IT infrastructure and data centre market is forecasted to reach £250 billion by 2026, marking a 107% increase from its 2020 valuation of £120 billion.

JLL describes an edge data centre as a facility that brings computing power closer to where data is generated or utilised. Emerging technological megatrends will not only drive the growth of edge computing globally, but also the rising demand for quick data transfer and powerful computing. Additionally, regulatory frameworks and policies will also play a critical role. From an infrastructure perspective, organisations are turning to edge data centres to process and analyse data in real-time at the network’s edge, enabling quicker decision-making and enhancing operational efficiency.

The expansion of edge IT infrastructure, particularly in data centres, will parallel the growth of IoT devices. JLL’s analysis suggests that IoT devices are expected to grow at a compound annual growth rate (CAGR) of 9.8% over the next five years. In a 2023 survey of data centre professionals, JLL found that the need for low latency and high bandwidth (41%) was the leading factor driving edge data centre deployments, with data security and privacy (38.3%) following closely behind.

The increasing demand from both consumers and businesses for enhanced products and services—such as low latency, high computing power, generative AI, and seamless connectivity, will likely ensure sustained growth in the cloud environment and the future of edge data centres. Additionally, regions like Asia Pacific (APAC) and the Middle East North Africa (MENA), which are experiencing significant growth due to rising internet and mobile penetration in rural areas, will further support the expansion of the edge data centre market. In the United States, 21% of data centre development is currently focused on edge locations.

Jonathan Kinsey, EMEA Lead and Global Chair of Data Centre Solutions at JLL, commented, “As consumers and businesses continue to integrate transformative technologies into their daily lives, the distribution of data processing and storage across multiple locations will be crucial. Without this, cutting-edge technologies such as IoT and generative AI cannot achieve mainstream adoption. Edge data centres will be vital in ensuring smooth business operations in the future economy, while also bolstering security measures and guarding against potential disruptions. By reducing latency through the proximity of computing infrastructure to data sources and users, edge IT infrastructure will become a key pillar of the global economy.”

JLL’s analysis indicates that enterprises typically deploy a mix of different data centre types—including on-premises, colocation, cloud, and edge—based on user requirements. However, the continuous increase in data generation and the proliferation of connected devices have escalated the need for enhanced storage, computing, and networking capabilities closer to end-users, driving the need for edge computing and corresponding data centres.

The size of the edge computing market can be assessed from various perspectives. JLL’s estimate of a $317 billion total addressable market includes the entire IT infrastructure, colocation revenue, colocation supply, and cloud services revenue, all concentrated at the edge. From an IT infrastructure standpoint, the edge computing market encompasses all the hardware, such as storage, computing, and networking equipment, necessary to deliver digital services at the furthest reaches of a network.